Thai Bank outlook lifted

Moody’s Investors Service has revised the outlook for Thai banks from negative to stable, reflecting improved credit conditions. Moody’s forecast economic growth of 3-5% for Thailand in 2010, following a contraction of 3% in 2009. Credit growth is projected at 5-10%, following a contraction of 2% last year. It said Thai banks would benefit from the expansionary government budget and stimulus spending. Moody’s noted that the crisis had had a limited impact on Thai banks, with asset quality stable and many banks reporting declines in non-performing loans. Profitability has also remained strong. “However, the sector’s resilience and ability to absorb the adverse effects of the global financial crisis could be fractured by the country’s fragile political environment,” it said.